NEW YORK (AP) — Dow Chemical Co. on Tuesday reported a surge in its fourth-quarter profit on gains from the sale of its chlorine operations and lower costs from sinking oil prices.
The profit boost comes as the Midland, Michigan-based company moves toward closing a merger with DuPont Co. in the second half of the year that would create a giant chemical company. Both companies are working to trim down some operations as the deal faces a significant review from regulators. The combined company, DowDuPont, will eventually be separated into three independent, publicly traded companies through tax-free spin-offs.
Fourth-quarter profit for the specialty chemicals maker rose more than four-fold to $3.61 billion, or $2.94 per share. Earnings, adjusted for one-time gains and costs, came to 93 cents per share.
The results surpassed Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 70 cents per share.
Revenue fell 20 percent to $11.46 billion in the period, but the results also topped Street forecasts. Three analysts surveyed by Zacks expected $11.24 billion.
The revenue decline was offset by a 24 percent drop in sales costs and a 4 percent boost in volume. Meanwhile, the company recognized a gain of just over $2.23 billion from the sale of its chlorine unit to Olin Corp.
For the full year, profit more than doubled to $7.69 billion, or $6.15 per share. Revenue fell 16 percent to $48.78 billion.
Meanwhile, Dow named James R. Fitterling president and chief operating officer from his prior position of vice chairman and chief operating officer. The company said he will play a central role in helping drive the completion of the proposed DowDuPont merger.
Shares of Dow rose $1.32, or 3.1 percent, to $43.90 in premarket trading about 75 minutes ahead pf the market opening.
Dow Chemical shares have fallen 17 percent since the beginning of the year, while the Standard & Poor's 500 index has fallen 5 percent. The stock has fallen roughly 6 percent in the last 12 months.